The fact that the IRS is going to be scrutinizing online payments shouldn’t come as a surprise to anyone. I’m actually surprised it hasn’t happened yet. I’d welcome being able to receive official 1099s from Paypal to assist in my annual tax preparation. The proposed new form will be called a 1099-K, Merchant Card and Third-Party Payments. You can see a sample below.

Unfortunately, for those of us managing small online businesses, this new scrutiny is only going to apply to those with sales exceeding $20k and 200 transactions.

Perhaps Paypal will give the rest of us an option to receive reporting based on this new requirement. One can hope, right?

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Comments

This would not hurt me as I already pay business and state sales taxes, however, those who are not yet a legitimate business, this would be horrible! I, too, am surprised that this has not happened yet!

Thank you for this very informative post. I just want to share a PDF Search Engine just in case you are looking for a blank fillable 1099s. It has tons of Tax forms and allows users to esign, fill out and even create templates. I was able to get the form I need from here: http://goo.gl/Nx7km7